Budget 2013/14 and Business Plan Town Hall March 7, 2013 ANNUAL BUDGET 2013/14

Presentation Outline Financial Health of the College Challenges Ahead Annual Budget 2013/14 2 March 7, 2013

Financial Health – Ratio Analysis 1. Quick Ratio 2. Total Debt to Assets Ratio 3. Debt Servicing Ratio 4. Net Assets to Expense Ratio 5. Net Income to Revenue Ratio 6. Net Asset Summary Annual Budget 2013/14 3 March 7, 2013

Quick Ratio March 7, 2013 Annual Budget 2013/14 4 Objective: Fiscal performance indicator testing the college’s ability to pay its short term maturing obligations (e.g. biweekly payroll payments). Benchmark: Less than 1.00 is typically a concern because it begins to indicate that a college may not be able to meet its short term obligations. Note: When including surplus cash invested in longer term investments (greater than 1 year) Algonquin’s Quick Ratio is in the range of 1.75 to 2.00 Compare with 2003/04 Quick Ratio of 0.8

Total Debt to Assets Ratio March 7, 2013 Annual Budget 2013/14 5 Objective: Measures the proportion of total assets that are financed by debt. A high or increasing value may be predictive of future liquidity problems or a reduced ability to borrow money in the future. Benchmark: Greater than 35% leads to a concern as this may indicate that a college will not be able to finance their ongoing operations due to the debt burden. Note: Compare with 2003/04 Total Debt to Assets Ratio of 52%

Debt Servicing Ratio March 7, 2013 Annual Budget 2013/14 6 Objective: This ratio measures the College’s spending on servicing the debt portfolio and could be used as an indicator that the college may be over-leveraged in debt. Benchmark: A ratio greater than 3% indicates that the college is spending less than 97% on core services which leads to a possibility that the college may be over-leveraged with debt payments. Note: Compare with 2003/04 Debt Servicing Ratio of 2.7%

Net Assets to Expense Ratio March 7, 2013 Annual Budget 2013/14 7 Objective: A traditional indicator to ascertain the ability of a college to continue operations in the event there is a delay in revenue streams. Benchmark: Less than 60% may be a concern since it could indicate that a college may not have sufficient internally accumulated resources in the future to fund operations and may be heading towards a deficit position. A negative percentage indicates the college is already in a deficit position. Note: Compare with 2003/04 Net Assets to Expense Ratio of 48%

Net Income to Revenue Ratio March 7, 2013 Annual Budget 2013/14 8 Objective: This ratio is an indicator of fiscal performance that measures the extent of a balanced budget. Benchmark: Less than 1.5% may be a concern because it may indicate that the college may not be able to recover from a deficit position in a reasonable period of time. Note: Compare with 2003/04 Net Income to Revenue Ratio of (0.24)%

Net Asset Summary March 7, 2013 Annual Budget 2013/14 9 Objective: To measure a net asset balance for operating purposes. Benchmark: Less than zero indicates an accumulated deficit. Note: Compare with 2003/04 Net Assets Summary of $(5,143k)

Financial Health – Results Algonquin College is in Good Financial Health Annual Budget 2013/14 10 March 7, 2013

CHALLENGES AHEAD Budget 2013/14 and Business Plan Town Hall Annual Budget 2013/14 March 7, 2013

Date PowerPoint Presentation Title

Public Funding vs. Other Revenues Annual Budget 2013/14 13 March 7, 2013

College Funding Framework Annual Budget 2013/14 14 March 7, 2013

Budget Challenges March 7, 2013 Annual Budget 2013/14 15 Ontario Economy and Fiscal Uncertainty Deficits projected up until 2017/18 Revised Tuition Fee Framework No Indication of New Capital Funding Budget Measures Implemented:

Seeking Solutions March 7, 2013 Annual Budget 2013/14 16 Growth of Funded and Non-Funded Activities New Programs Mobile/Online/Hybrid/Applied International Opportunities Corporate and Contract Training College Ancillary Services Technology and Automation of Processes Core vs. Non-Core functions Partnerships Business Process Review Responsibility Centre Management

Annual Budget 2013/14 17 March 7, 2013

Budget Highlights March 7, 2013 Annual Budget 2013/14 18 BALANCED BUDGET: Funded Activity - Aligned the College’s operating expenditures and revenues within the provincial funding and tuition fee framework Non-Funded Activities generating surpluses to fund Strategic Investment Priorities Projected enrolment increase of 3.1% Expansion of Mobile Learning Programs New faculty and staff positions to accommodate growth $2.5M for Professional Development of faculty and staff

Date PowerPoint Presentation Title 19

Revenue Annual Budget 2013/14 March 7, 2013 Annual Budget 2013/14 20

Expenditures Annual Budget 2013/14 March 7, 2013 Annual Budget 2013/14 21

Strategic Investment Priorities (SIP) Annual Budget 2013/14 March 7, 2013 Annual Budget 2013/14 22

QUESTIONS? Annual Budget 2013/14 March 7, 2013